IT for Management: On-Demand Strategies for

Performance, Growth, and Sustainability

Eleventh Edition
Turban, Pollard, Wood

Chapter 8

Retail, E-Commerce, and Mobile Commerce

Technology
Learning Objectives (1 of 5)
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Retailing Technology: Consumer Demands

• Keeping Up With Consumer Demands and Behavior

o A dizzying array of new technologies are exciting and
unproven.
o Adoption is vital, but budgets are limited.
o Consumers are demanding, price-conscious, and easily
swayed by competitors.
o Overly aggressive marketing leads to financial ruin, but risk
aversion loses out to competition.

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Retailing Technology: Consumer Behavior (1 of 3)

• Trends and Changing Behavior

o Empowered Price Sensitivity: using the latest technology to
find the lowest price available.
o Nonlinear Search and Influence Patterns: consumers pursue
path through a range of new communications channels
including social media, mobile ads, e-mail, search marketing,
and other digital communications.
o Channel Hopping: increased communication channels through
which consumers can now purchase products (traditional
retailers, online, and via mobile devices and apps) called social
commerce.

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Retailing Technology: Consumer Behavior (2 of 3)

• Consumer Demands and Behavior

o Digital Immigrants: older consumers that fundamentally view
retail channels as separate and distinct.
o Digital Natives: first digital generation surrounded by digital
devices and Internet connectivity.
o Digital Dependents: emerging generation growing up in a
world of broadband connections, constant connectivity that
place greater demands on retailers to use technology.

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Retailing Technology: Consumer Behavior (3 of 3)

• Need for Convenience

o Economic and social factors lead to more stressful lives.
o Consumers look for products and shopping channels that
reduce the impact on time and financial resources.
o An increasing demand to satisfy immediate gratification and
desirable goods and services.

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The Omni-Channel Retailing Concept

Figure 8.3 Retail strategy is evolving toward an omni-channel approach

(adapted from National Retail Federation, 2011).
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Learning Objectives (1 of 5)
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Business to Consumer (B2C) E-commerce

• Purchasing Online
o The most well-known B2C site is Amazon.com, whose IT
developments received U.S. patents that keep it ahead of
competition.
o Broader selection, lower prices, and easy searching and
ordering are featured through e-commerce.
o Electronic Wallet (e-wallet ): a software application that can
store encrypted information about a user’s credit cards, bank
accounts, and other information necessary to complete
electronic transactions.
https://www.tokopedia.com/

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Business to Consumer (B2C) E-commerce:
Online Banking
• Online Services
o Electronic fund transfer (EFT): transfer of funds from one
bank account to another over a computerized network.
o Investment options and loan rates online easily undercut
those of many brick-and-mortar (conventional) banks.

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Business to Consumer (B2C) E-commerce:
Recruiting
• Employment
o Job openings, résumés, and applications can be
transmitted or completed 24/7, 365.
o Job seekers use social media network contacts
(LinkedIn).
o Over 95% of employers use LinkedIn to identify
prospective candidates.
o Online reputation of both job seeker and employer
can be researched and/or built.

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Business to Consumer (B2C) E-commerce:
Retailing Issues (1 of 3)
• Resolving Channel Conflict
o When regular wholesalers (on-ground) and retailers
(on-line) circumvent direct online distributors.
o May limit B2C efforts not to sell directly.
o May force collaboration with existing distributors.
• Conflicts within click-and-mortar organizations
o Online sales may impact offline operations
o Companies may separate online from traditional
divisions

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Business to Consumer (B2C) E-commerce:
Retailing Issues (2 of 3)
• Managing Order Fulfillment and Logistics
o Online sales force the need to design systems to accept and process huge
volumes of small orders, physical delivery including labeling.
• Viability and Risk of Online Retailers
o The dot.com era bankrupted many pure online retailers due to cash flow,
customer acquisition, order fulfillment, and demand forecasting problems.
o Low entry barriers intensify competition!
• How long to operate while losing money? (burn rate)
• How to finance operating losses?

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Business to Consumer (B2C) E-commerce:
Retailing Issues (3 of 3)
• Identifying Appropriate Revenue Models
o Early dot.com model:
• Generate enough revenue from advertising to keep the
business afloat until customer base critical mass is reached.
• Too few dotcoms were competing for too few advertising
dollars

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Business to Consumer (B2C) E-commerce:
Planning
• Online Business and Marketing Planning
o Build the marketing plan around the customer, rather than
on products.
o Monitor progress toward the one-year vision for the business
in order to identify when adjustments are needed, and then
be agile enough to respond.
o Identify all key assumptions in the marketing plan. When
there is evidence that those assumptions are wrong, identify
the new assumptions and adjust the plan.
o Make data-driven, fact-based plans.

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Learning Objectives (3 of 5)
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Business to Business (B2B) E-commerce
and E-procurement
• Business-to-business (B2B) Markets
o The buyers, sellers, and transactions involve only
organizations
o B2B comprises about 85 percent of e-commerce dollar volume
o Enterprise forms electronic relationships with distributors,
resellers, suppliers, customers, and other partners
• Business models for B2B applications:
o Sell-side marketplaces
o E-sourcing (the buy-side marketplace)

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Business to Business (B2B): Sell-side Marketplaces

• Sell-Side Marketplaces
o Where organizations sell their products or services to other
organizations from their own private website or from a third-
party site.
o Similar to B2C model, but the ‘C‘ is an organization.
• Amazon Business
• Alibaba wholesaling Chinese products
• Dell Computer auctions through eBay

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Business to Business (B2B): E-sourcing

• Different procurement methods that make use of an

electronic venue for identifying, evaluating, selecting,
negotiating, and collaborating with suppliers.
• Primary methods include: Online auctions, Request for
Quotes (RFQ) processing, and private exchanges.
• Secondary activities include: trading partner
collaboration, contract negotiation, and supplier
selection.

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Business to Business (B2B): E-procurement

Direct
Procurement
Corporate
Procurement
Indirect
procurement

E-procurement: reengineered procurement using e-

business technologies and strategies.

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Business to Business (B2B): E-procurement
Goals

1 •Control Cost
2 •Simplify Process
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Business to Business (B2B): Electronic Data
Interchange (EDI)
• The Electronic Data Exchange or EDI is a
technology that helps trading organizations and
partners get more done faster by speeding up
logistics timelines and eliminating manual
errors through business to business
communication automation.

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Business to Business (B2B): Electronic Data
Interchange (EDI)

Purchase Order
Buyer Seller
Sales Invoice

Example of EDI:
✓ Purchase Order (EDI 850)
✓ Shipping Statuses (EDI 214)
✓ Invoices Custom Information
✓ Payment Information (EDI 820)

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Learning Objectives (4 of 5)
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Mobile Commerce
• Mobile Commerce, or M-Commerce:
o The buying or selling of goods and services using a wireless,
handheld device such as a cell phone or tablet (slate)
computer.
• Mobile E-Commerce
o The use of a wireless handheld devices to order and/or pay
for goods and services from online vendors.

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Mobile Commerce: Retailing & Marketing

• Mobile Retailing
o The use of mobile technology to promote, enhance, and add
to value to the in-store shopping experience.
• Mobile Marketing
o A variety of activities used by organizations to engage,
communicate, and interact over Wi-Fi and
telecommunications networks with consumers using wireless,
handheld devices.

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Mobile Commerce: Competitive Advantage
• M-commerce provides competitive
advantage
• In-Store Tracking
o Tracking a customer’s movement
through a retail store through
mobile technology to optimize
shopping experiences.
• Quick Response (QR) Codes
o Customers scan the QR code
containing a link to an Internet
webpage.
o Easier alternative to typing a URL
address into a mobile browser.

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https://www.youtube.com/watch?v=oLedMqa_uGo

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Mobile Entertainment Expanding

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Mobile Travel Services

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Mobile Social Networking
• Facebook added mobile access in recent years to stay
competitive.
• Snapchat is completely app-based.
• Occurs in virtual communities, offering users to access
their accounts from a smartphone or other mobile
device.
• Primary driver of growth in the mobile app industry.

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Mobile Commerce App Features
• Location-Based Marketing
o Advertising using mobile GPS systems to determine user
locations.
o Structured as mobile social media games to elicit consumer
information and ratings for special attention or discounts from
retailers.
• Augmented Reality (AR)
o Apps that utilize a special technology to create computer-
generated graphic superimposed images based on where/how
a user points their phone or camera.

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Mobile Search
• Almost 60% of all Internet searches are conducted from
a mobile device
• Over half of all web traffic comes from mobile devices
• As a result, Google and other Internet search engines
now use the performance of a company’s mobile
website as part of the criteria for ranking listing in
search results

SEO specialists must now focus on a set of new factors for

optimizing websites for mobile search.

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Mobile Search
SEO
It’s the practice of increasing both the quality and
quantity of website traffic, as well as exposure to your
brand, through non-paid (also known as "organic") search
engine results.

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Learning Objectives (5 of 5)
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Mobile Payment Systems (1 of 2)

• Charge to Phone Bill with SMS Confirmation

o Uses secure PIN through SMS to validate payment (like
Zong.com).
• E-Wallet (Gopay, Ovo, Dana)
• QR Code

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https://www.youtube.com/watch?v=DlSjAsDu01Y

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Mobile Payment Systems (2 of 2)
• Transfer of Funds from Payment Account Using SMS
o Phone sends SMS to transfer payment through third party
(Obopay.com, PayPal.com)
• Mobile Phone Card Reader
o Phone attached device allows credit card swipe (Square.com,
Paypal.com)
• Micropayments
o Transactions involving small sums of money (vending
machines, parking meters)
• Mobile Bill Payments
o Payments made directly from cell phone (Western Union,
Citibank, HDFC Bank in India)
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Mobile Banking Services

• Natural extension of online banking

• Uses combination of mobile media channels
o (SMS, mobile Web browsers, customized apps)
• Common services include account alerts, balance
information, branch location, bill pay, funds transfers
and verification
• Mobile banking benefits seem to outweigh potential
security threats.

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Group Discussion
Assume that you are an IT Consultant that frequently
traveling. You are about to have business trip however
you do not typically have time to always explore travel
website/application. Therefore, you wish to identify the
travel app/website that works best for you.

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Group Discussion - Continued
Working in a group, use the internet to explore two travel sites.
Select several travel destinations and see how helpful each site in
term of:
a. Finding the lowest airfare
b. Identifying hotel for business travel
c. Recommendations for dining and other location-based services
d. Availability and usefulness of travel tips, advisories, and other
helpful information
e. Prepare a report comparing how each site performed in terms
of its ease of use, helpfulness, and best overall deal. Which
site would you recommend?

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Mobile Banking Security Risks
Cloning Duplicating the electronic serial number (ESM) of one phone and using it in
second phone, the clone. This allows the perpetrator to have calls and other transactions
billed to the original phone.
Phishing Using a fraudulent communication, such as an e-mail, to trick the receiver into
divulging critical information such as account numbers, passwords, or other identifying
information.
Smishing Similar to phishing, but the fraudulent communication comes in the form of an
SMS message.

Vishing Again, similar to phishing, but the fraudulent communication comes in the form
of a voice or voicemail message encouraging the victim to divulge secure information.
Lost or stolen phone Lost or stolen cell phones can be used to conduct financial
transactions without the owner’s permission.

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Copyright
Copyright © 2018 John Wiley & Sons, Inc.
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or from the use of the information contained herein.

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